China in ‘bubble’ warning as spending tops $1 billion

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China in 'bubble' warning as spending tops $1 billion
(FILE PHOTO: AFP)
Shukriya Pakistan

China’s state media warned a “bubble” had developed in Chinese football on Friday after spending topped $1 billion this year and rumours swirled of yet more big-money signings.

Chelsea’s Oscar and Argentine forward Carlos Tevez were the latest players linked with the deep-pocketed Chinese Super League this week as clubs look set to extend their lavish spree.

The influential People’s Daily urged clubs to control their “headstrong” spending, which follows official decrees that China should become a global football superpower.

While there is “no reason to restrict capital” in the Super League, clubs must have focus and discipline on spending for the sake of their own long-term health, an article in the Communist Party mouthpiece said.

It said 8 billion yuan ($1.15 bn) had been spent in 2016, a sum which “far exceeded the economic value brought to the league”. The explosive growth in football investments is a “bubble” given the slower growth in ticket and licensed product sales, the article added.

Chinese firms have spent freely this year on foreign football clubs, players, and broadcasting rights in an effort to diversify their businesses and aid Chinese President Xi Jinping’s dream of making China into a global centre of gravity for the sport.

Xi is a known football fan and in 2011 — when he was still vice-president — he laid out three hopes for China’s football future: to qualify for another World Cup, to host a World Cup and to win a World Cup.

Chinese Super League clubs smashed the Asian record four times in the January-February window, and they have spent more than $400 million on players overall this year.

Shanghai SIPG are reported to be on the verge of breaking the record again with a £60 million transfer ($76 million) swoop for Chelsea’s Brazilian midfielder Oscar.

Argentine media reported Thursday that Tevez, 33, could pocket 40 million euros a season — 20 times what he currently earns at Boca Juniors — in a two-year deal with Shanghai Shenhua.

Last month, Suning Holdings secured the Chinese broadcast rights of the popular English Premier League for a reported $650 million over three years, in what would be a 12-fold increase on the current deal.

Suning is also a majority stakeholder in Italy’s Inter Milan, one of a string of European clubs which have been taken over or attracted investments from Chinese companies.

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